Question
Q4. Essence Lavvy purchased a new machine on January 20th, 2019 for $1,000,000 on credit. The supplier has offered A&A terms of 2/10, net 50.
Q4. Essence Lavvy purchased a new machine on January 20th, 2019 for $1,000,000 on credit. The supplier has offered A&A terms of 2/10, net 50. The current interest rate the bank is offering is 20 percent. (Assume a 360-day year.)
- Compute the cost of giving up cash discount.
- Should the firm take or give up the cash discount?
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Finance For Non Financial Managers
Authors: Gene Siciliano
1st Edition
0071413774, 978-0071413770
